Risk Management Definition

Risk management refers to the strategies and practices used to identify, assess, and control potential losses in trading or investing.

What is Risk Management?

Common risk management tools include stop-loss orders, position sizing, and diversification.

Effective risk management is considered essential for long-term success in trading.

Setting a stop-loss on every trade to limit potential losses is a basic form of risk management.

A rally is a sustained period of rising prices in an asset or market, often following a decline or period of stability.

Range trading is a strategy that involves buying near support and selling near resistance within a defined price range.

Rate of return is the gain or loss on an investment over a period of time, expressed as a percentage of the initial investment.